Employer's Guide to Unemployment Insurance Tax in Georgia

If your small business has employees working in Georgia, you must pay Georgia unemployment insurance (UI) tax. The UI tax funds unemployment compensation programs for eligible employees. (In Georgia, state UI tax is just one of several taxes that employers must pay. Other important employer taxes, not covered here, include federal UI tax, and state and federal withholding taxes.)

Different states have different rules and rates for UI taxes. Here are the basic rules for Georgia's UI tax.

Register With the Department of Labor

As a Georgia employer, your small business must establish a Georgia UI tax account with the Georgia Department of Labor (GDOL). You don't have to pay a fee to register your business with GDOL.

To register for an account with the GDOL, use Form DOL-1A, Employer Status Report. You can access and download a blank form on the GDOL website, which you must fill out and return to the GDOL via mail. Unlike other states, in Georgia, you can't register for a UI tax account online.

GDOL will review your filing, and if it determines your business is liable for UI tax, it will issue you a UI tax account number. (Most employers are liable for the tax.)

To establish your Georgia UI tax account, you'll need a federal employer identification number (EIN). You can apply for an EIN at IRS.gov. Generally, if you apply online, you will receive your EIN immediately.

Rules for Unemployment Insurance Tax Liability

As a Georgia for-profit employer, you generally are liable for state UI taxes if you meet any of the following conditions:

• employers with a quarterly payroll of $1500 or at least one worker in 20 different calendar weeks during a calendar year
• agricultural employers with at least $20,000 in gross payroll for a calendar quarter or with 10 or more workers on any day during 20 different weeks in a calendar year. (Exclude food and lodging for agricultural employees), or
• domestic employers with a payroll of at least $1,000 in any calendar quarter.

Basically, if your business is liable under the Federal Unemployment Tax Act (FUTA), it's likely also liable for state UI taxes, and vice versa. One piece of good news is that state UI tax payments generally can be credited against your FUTA taxes.

Wage Base and Tax Rates

UI tax is paid on each employee's wages up to a maximum annual amount. In recent years in Georgia, that amount, known as the "taxable wage base," has been stable at $9,500 (2023). However, it's always possible that amount could change.

The state UI tax rate for new employers also can change from one year to the next. In recent years, the rate has been 2.7%. That rate generally remains in effect for at least 36 months.

Established employers are subject to a lower or higher rate than new employers depending on an "experience rating." This means, among other things, whether your business has ever had any employees who made claims for state unemployment benefits.

File Quarterly UI Tax Reports and Payments

In Georgia, UI tax reports and payments are due at the end of the month following the end of each calendar quarter. In other words:

You can file your reports and payments online or on paper. To file online, go to the Employer Portal on the GDOL website. To file on paper, use Form DOL-4N, Employer's Quarterly Tax and Wage Report. You can download a blank form from the GDOL website.

You must file reports even if you pay no wages during a particular quarter. You will be subject to a penalty if you fail to file.

Post a Notice (Poster)

You are required to post a notice (poster) regarding state unemployment claims in places readily accessible to employees. The poster provides basic information on when an employee may be eligible for unemployment benefits and how to file an unemployment claim.

You can download a notice that meets all legal requirements (Form DOL-810) from the GDOL website.

Do Not Misclassify Employees as Independent Contractors

Employers who use independent contractors rather than hiring employees aren't subject to the UI tax. However, it's important that you don't misclassify an employee as an independent contractor.

If you misclassify an employee, you could be subject to penalties or fines.

Using Payroll Service Companies

You might decide that it's easiest to hand over responsibility for payroll, including UI taxes, to an outside payroll service. If so, keep in mind that your business, or even you personally, may still be held directly responsible for mistakes made by an outside payroll company.

Additional Information

This article touches on only the most basic elements of Georgia UI taxes. Avoid possible penalties for making mistakes by checking both the IRS and GDOL websites for the latest information. GDOL also has a helpful Employer Handbook that you can download from the GDOL website.

In addition to state UI tax, employers have other responsibilities not covered in this article, such as federal UI tax, state and federal withholding taxes, required reporting of new hires, and required retention of employee records.

Talk to a tax lawyer or employment attorney to learn more.